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NEW YORK (Dow Jones)--The U.S. Midwest prompt aluminum premium over London
Metal Exchange cash prices is edging up as the expiration deadline to aluminum
giant Alcoa Inc.'s (AA) master labor contract nears.
The premium, reported by traders and analysts Thursday, was said to be in a
5.75-6.25 cent range, up from a previous range of 5.50-6.0 cents.
"Metal is not quite tight but it is (more in line) with high freight costs,"
said a trader adding that a "strike hedge" is being added into the premium as
talks between Alcoa and the United Steelworkers union kick off on May 18.
The contract that covers 15 U.S. locations and about 9,000 employees is set
to expire on May 31.
With the talks in mind and the potential of a strike whirling through the
market, traders noted some stockpiling of metal taking place.
"There is some building but no frenzy," a trader noted.
LME cash aluminum was officially quoted at $2,752-$2,753 per metric ton, or
about $1.2480-$1.2485 per pound.
Inventories of aluminum stored in LME warehouses rose 13,300 metric tons to
751,600 on Thursday versus the previous day.